Thursday, November 15, 2012

Iraq’s National Electrical Grid Continues To Struggle, While Kurdistan’s Flourishes

Iraq’s national grid reached a record high in output in the
third quarter of 2012. It added over 1,000 megawatts to its production. The
government was still meeting less than 50% of demand. In contrast, in northern
Iraq, the Kurdistan Regional Government (KRG) was reaching 85% of demand, and
has even started exporting power to three neighboring provinces. This provides
a stark contrast in strategies as Baghdad has relied upon a centralized public
system, while the KRG has turned to private companies.

By October 2012, Iraq saw a large increase in power output,
but it was still not enough to satisfy the public’s needs. At the end of the
month, the Electricity Ministry claimed that it was producing 8,000 megawatts. The Special Inspector General for Iraq Reconstruction (SIGIR) disagreed,
and said that Iraq was only producing around 7,300 megawatts at that time. Still, SIGIR said that was the highest amount ever for the Ministry. In
comparison, in the 2nd quarter, the national grid was putting out 6,200 megawatts. This 1,100 megawatt increase was due to new power plants
coming on line in May and June, and older ones being refurbished. Despite this
large jump, the government was only able to provide an average of 10-12 hours
per day to the citizenry. As has happened every year in recent history, supply
was far short of demand, which was around 15,000 megawatts. The Electricity
Ministry claimed it could have done an even better job, if not for the Oil
Ministry, which failed to deliver the required fuel for power plants. Also
contributing to national output is around 1,050 megawatts imported from Iran,
and 20 megawatts from several power ships docked in Basra. The end of
international sanctions, and the growing buying power of Iraqis, especially
those with government jobs, has led to a huge increase in consumer goods being
used across the country. That’s why demand has increasingly gone up at just
about the same rate as production, causing the power gap, and constant
blackouts.

The government has led the growth in the power sector. The
Electricity Ministry does most of the work, but the Oil Ministry is just as
crucial as it delivers fuel to the plants. There is also Deputy Prime Minister
Hussein Shahristani that is in charge of the energy portfolio in Baghdad. Every
couple months, the Electricity Ministry makes announcements about their grand
plans. For example, right now it has 41 power plants under construction. It has
claimed that it will reach 12,330 megawatts by April 2013, 20,000 megawatts by 2014, and then 22,000 megawatts by the end of 2015 when all of the new
plants are supposed to come on line. The International Energy Agency has
predicted that supply and demand would finally meet at that time if the new
electricity plants were not delayed. The problem is the government has
consistently missed its marks. For example, it said it would reach 7,450
megawatts by June, and 9,000 megawatts by July. That was later reduced to 8,000 megawatts by August. None of those amounts were ever met. Almost as
soon as those announcements were made the Ministry tried to step back from
them. In July, Electricity Minister Abdul Karim Aftan stated that some
companies would not finish their work on time. By September, Deputy Premier
Shahristani said that the Electricity Ministry’s predictions should not be
listened to, and that its numbers were theoretical only. He also told SIGIR
that some of the deals recently signed for constructing new power plants and
installing turbines would not come to fruition. Baghdad is the center of a
highly inefficient government. Corruption is rampant, which takes a heavy toll on any public tenders offered. Most of the bureaucracy is not used to
dealing with private businesses, because of its socialist past. Third, there is
no control on usage, as Iraqis don’t pay their power bills. Finally, the entire
grid is poorly designed, has large amounts of power stolen, and has the highest
levels of waste in the Middle East. SIGIR reported that up to 1/3 of the power
generated is lost before it ever reaches users as a result. Despite these
repeated failures the central authorities have not considered privatizing the
system. That’s because of its tradition of having a command economy.

The complete opposite has occurred in the north. In Kurdistan,
the regional government is producing 1,950 megawatts. That meets 85% of demand,
and averages out to around 20 hours per day, twice the amount seen in the rest
of the country. Not only that, but the KRG has started exporting power to some
of its neighbors. In June, it began delivering 200 megawatts to a part of Tamim province, 50 megawatts to an area near Mosul in Ninewa, and 10 megawatts to the
Tuz district of Salahaddin in August. These deals were worked out
individually with the provincial governments, and did not include Baghdad. The
KRG is not done. It recently singed deals with two South Korean companies to build another power plant and install transformers. Unlike in the rest of
Iraq, the plants in Kurdistan are privately owned and run. They are doing a far
better job producing electricity than in the rest of the country. The
government plays a large role in the regional economy, but the KRG has been far
more open to private investment, and creating an enticing business environment,
because it has wanted to develop quickly after it got real autonomy following
the 2003 fall of Saddam Hussein.

The two parts of Iraq are taking different paths to provide
electrical services to the public. In Baghdad, the central government is
attempting to direct and run the national grid. While production has gone up
for the last several years, it has no control over usage, and can’t meet its
own goals. In Kurdistan, the regional government has allowed private companies
to run the major new power plants, and the results have been far superior as it
has the highest average power supply, and is nearly meeting demand. These two
approaches will continue on their separate paths, as the differences between
the two politically will prohibit any kind of cooperation that might be able to
solve the country’s pressing need for electricity.

SOURCES

Ali, Nashoor, “Iraq only producing one third of its
electricity needs,” Azzaman, 8/28/12

IRAQ HISTORY TIMELINE

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About Me

Musings On Iraq was started in 2008 to explain the political, economic, security and cultural situation in Iraq via original articles and interviews. I have written for the Jamestown Foundation, Tom Ricks’ Best Defense at Foreign Policy and the Daily Beast, and was responsible for a chapter in the book Volatile Landscape: Iraq And Its Insurgent Movements. My work has been published in Iraq via NRT, AK News, Al-Mada, Sotaliraq, All Iraq News, and Ur News all in Iraq. I was interviewed on BBC Radio 5, Radio Sputnik, CCTV and TRT World News TV, and have appeared in CNN, the Christian Science Monitor, The National, Columbia Journalism Review, Mother Jones, PBS’ Frontline, the Center for Strategic and International Studies, the Institute for the Study of War, Radio Free Iraq, Rudaw, and others. I have also been cited in Iraq From war To A New Authoritarianism by Toby Dodge, Imagining the Nation Nationalism, Sectarianism and Socio-Political Conflict in Iraq by Harith al-Qarawee, ISIS Inside the Army of Terror by Michael Weiss and Hassan Hassahn, The Rise of the Islamic State by Patrick Cocburn, and others. If you wish to contact me personally my email is: motown67@aol.com